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FINANCIAL
GLOSSARY : T
Tax credit
Dividends payments
are received in net because companies are required to deduct tax when
paying out a dividend. If your rate of tax is lower than the rate paid
by the company, then you are allowed to receive the difference as tax
credit.
Tax avoidance
An attempt to minimise
the tax payable by legal means.
Tax-efficient
investments
Investments that
have less of a tax consequence than other investments
Tax evasion
An attempt to minimise
the tax payable by illegal means, e.g., by reporting inaccurately.
Tax year
The tax year begins
on April 6 and ends on April 5 the following year.
Tender offer
Method of raising
capital by inviting investors to make bids for the price they are willing
to pay for the shares.
Term insurance
A life insurance
policy set up for a specified number of years. If you survive the term
of the policy then you do not receive anything. This type of policy
is often used to cover long term loans or mortgages. It is the simplest
and cheapest form of life insurance.
Tied agent
A tied agent is
a financial salesman who can only offer to sell the products of one
company, rather than looking at the whole market for products that best
suit you.
Total return
The total return
on an investment is the combination of both the income return and any
capital gain or loss.
Tracker
fund
Investment funds
that invest in a share portfolio weighted according to the market capitalisation
of the various shares in that index, e.g., the FTSE 100. They buy and
sell shares according to changes in relative market capitalisation of
the companies. These tracker funds thus try to "track" the
market rather than beat it.
Transfer
value
The value of the
pension benefits that you are allowed to take if you decide to leave
an occupational pension scheme. The precise value of these benefits
will be calcuated by an actuary who works for the pension scheme administrator.
Trustee
An individual or
organisation who/that looks after assets for the benefit of another.
